New Study by U.S. Treasury on Ecology and Taxes

Posted on November 6, 2021

New Study by U.S. Treasury on Ecology and Taxes

The National Academy of Science (NAS) is carrying out a $1.5 million study that aims to take an inventory of the U.S. tax code and how it effects the emission of carbon dioxide and other greenhouse gas emissions. The study does not aim to change tax codes or recommend new taxes; it will examine how and whether different taxes help in reducing GHG emissions or not.

Even though the results of the study will be out only after the elections, it will provide the government and environment activists with much food for thought. adds:

“The results will likely bring an entirely new dimension to any future bargaining table in Washington that aims at achieving financial reform.  Such bargaining is considered nearly inevitable as the U.S. tries to back away from the fiscal cliff created by towering annual deficits and still accelerating obligations under Social Security and still-to-be implemented Obamacare.

What the NAS study will examine are the basic building blocks of the tax system, but not from a job creation or growth perspective. Instead, the question is what levels of greenhouse gas are currently produced by its provisions.

These include not only deductions and allowances for production of varying types of energy, but also such things as the home mortgage deduction and the investment tax credit to spur business activity, not to mention tax provisions that affect patterns of urban development, agriculture, forestry and all manner of industrial processes.”

The study is being overseen by an ad hoc committee compromising of experts in climate change and economists, but there are dissenting voices. Some environmental experts and politicos are calling the study a “waste of money”. Fox News shares: “According to Ken Green, an environmental expert at the American Enterprise Institute, the entire NAS study “look like another effort aimed at paving the way for weaving carbon taxes into tax reform.”

Green says that option is favored not only by political liberals, but also by some conservatives who want  a “revenue-neutral” version of carbon taxes to, among other things, “green up the conservative brand.”

Green argues that such taxes are not only ineffective, but dampen economic growth and are actually regressive, hitting lower-income Americans higher than harder-income earners.”

In the battle between taxes and the environment, it remains to be seen how the study will impact the tax code, government policies and our perspective.